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Consider the following information for Watson Power Company: Debt: 4 , 5 0 0 7 . 5 percent coupon bonds outstanding, $ 1 , 0

Consider the following information for Watson Power Company:
Debt:
4,5007.5 percent coupon bonds outstanding, $1,000 par value,
22 years to maturity, selling for 104 percent of par; the bonds
make semiannual payments.
Common stock: ,112,500 shares outstanding, selling for $62 per share; the beta is
1.2.
Preferred stock: 16,000 shares of 6.5 percent preferred stock outstanding,
currently selling for $106 per share.
Market: ,9 percent market risk premium and 6.5 percent risk-free rate.
Assume the company's tax rate is 34 percent.
Find the WACC.
Multiple Choice
11.47%
11.87%
11.37%
12.32%
11.62%
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